Insurance Helpline with Cedric Stephens Question: I used a finance company to pay the premium for my motor policy. In December 2006, I told them that I was having problems meeting the payments. They said to pay what I could. I visited the brokers in January to find out about my account. I found that the policy was cancelled.
The insurers advised the brokers in my presence that they would reinstate the coverage when I paid the finance company. I did so on January 26, 2007, and collected a receipt.
The finance company representative spoke with the insurers by phone. The person there agreed to revoke the cancellation immediately. At the time, I still had a certificate of insurance. Its expiry was March 28. My car was hit on January 28 while I was driving on Hope Road. The other car was travelling in the opposite direction. It drove across the dividing strip. The estimate to fix my car is $470,000. My insurers say that they will not settle my claim. My policy was cancelled since December 4. Can you help me to sort out the matter?
- JO, May Pen P.O., Clarendon.
Answer: Your insurers have slammed the door on this claim. The Financial Services Commission (FSC) should tell your brokers to 'lock up shop'. They have a licence but their employees don't have a clue about insurance broking.
Add to that a non-bank finance company that falls between theregulatory cracks. Its operations are not regulated by the central bank or the FSC. This gives it lots of space to do as it pleases with insurance contracts. These are some of the things at the root of your problem.
Good faith is one of the rocks on which insurance contracts are built. It means "a total absence of any intention to seek an unfair advantage; to fulfill one's obligation."
The rule applies to buyers and insurers. Is it good faith when the employee of an insurer agrees to reinstate a policy and the company later refuses to do so? This is definitely not 'insurance service at its best'.
I sent the company's GM a copy of your letter in mid-February and asked for comments. This was followed by a telephone call. Several weeks later there are no comments. Is this another broken promise? The way your policy was cancelled, though probably legal, leaves a nasty smell. Couldn't they have sent a text message to your cellphone when the registered letter giving notice of cancellation was returned unclaimed?
The broker's name should be changed to 'Insurance Jokers Limited'.
Other than collecting commissions they have no idea what real insurance brokers do. As a result, they were of no help after the accident. You had to do all the leg work in relation to your claim. You would be better off dealing direct with an insurer or finding a company that knows something about insurance broking.
The company that financed your premium should be avoided at all costs. They fall into the same group as the jokers (sorry, brokers). Look for another company to perform the job.
The solution to your problem lies with the insurers of the car that hit yours. This assumes that the person who was driving had a licence and was authorised to drive. Get a deal-direct letter from your insurers to contact them. Once you have done this and they have confirmed that every thing is OK it should be smooth sailing. Do not forget to include incidental expenses, the cost of the police report, the assessor's fees and medical expenses in your claim.
Finally, thanks very much for sharing your experiences with readers of this column. It is my sincere hope that my comments will help them avoid the problems that you encountered.
Cedric E. Stephens is an insurance consultant. He provides free, independent information and advice to consumers who need help to solve their problems. Email: aegis@cwjamaica.com
